‘Musk’s possible Reform donation shows we urgently need…reform of donations’

You can buy a lot with $100 million dollars: extravagant luxuries like private jets, luxury yachts, or even an entire Caribbean island.

This sum would also grant significant buying power in London’s high-end property market. However, when it comes to Elon Musk, it might also be enough to influence just who occupies the highest office in the land.

The news that Nigel Farage reportedly continues ‘negotiations’ with Elon Musk, the world’s richest man, over a potential funding for Reform UK  – with rumours that Musk was considering a staggering $100 million (£80 million) donation to the party – jolted even the most apathetic observers of political funding reform.

This “F**k you Starmer” payment, as some have described it, would not only be the largest political donation in history but would also mean foreign actors have been given free rein to meddle in UK politics.

Big money in British politics

While foreign donations are banned in UK politics, loopholes mean that money can be funnelled through UK companies from abroad, often obscuring the real donor.

But big money has long plagued our political system. Recent government changes have further exacerbated the issue by significantly increasing campaign spending limits, effectively unleashing an unprecedented arms race in political funding.

With more and more money flowing into our political system, it’s important to ask who is paying for it.

READ MORE: Two-thirds of voters back capping donations to political parties

In 2023 alone, UK political parties amassed a staggering £85 million from private donations, highlighting their insatiable appetite for cash.

Of this, more than two-thirds came from just 19 mega-donors giving a million or more. This reliance on a small pool of wealthy donors leaves parties vulnerable to foreign interference, undue influence, and the unchecked power of special interests.

Transparency International UK’s new report, Cheques and Balances reveals the extent of this problem through the most comprehensive analysis of suspect funds in UK political history. Our research found that nearly 10% of all donations to political parties since 2001 – a staggering £115 million – originated from ‘unknown or questionable sources.’

This includes donations from individuals accused or convicted of corruption, criminality, or those seeking to buy political access or influence.

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Furthermore, a significant portion of this suspect funding – £48.2 million – is linked to donors who have been alleged or proven to have bought privileged access, political influence, or even honours like knighthoods and peerages.

Millions more has been funnelled into our political system via shell companies used to hide the true source of donations – allowing overseas actors to exploit a loophole to circumvent the rules on foreign cash.

This has allowed nearly £11 million of donations from UK companies who have not made profits big enough to support their political contributions, leaving us with no idea where the money has actually come from.

Safeguarding our democracy

It’s in the government’s interest to take action to help safeguard the integrity of our democracy and end the influence of big money and foreign interference in UK politics.

Lower spending limits for elections would reduce the cost of campaigns, ending the reliance of political parties on large donations and stop the arms race in campaign spending. New limits to prevent UK companies from donating more than their UK profits would also close the foreign donation loophole and limit the ability of those seeking to ‘game the system’ and flood our politics with foreign funds.

However, the issue extends beyond the risks associated with individual donations to their donors. Public perception of the influence of big money significantly erodes trust in our political system.

When the public perceives that politicians prioritise the interests of wealthy donors over the public good, or that access and influence are primarily determined by financial contributions, trust in our political institutions inevitably suffers.

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Unsurprisingly, there is widespread public support for reforms aimed at addressing this issue. As LabourList revealed – a recent poll by Opinium found that two-thirds of people back capping donations to political parties.

Keir Starmer was right to say that ‘The fight for trust is the defining battle of our political era.’ This challenge means it’s vital that Labour takes action to counter the seemingly unstoppable influx of big money into our political system and ensure that democracy remains in the hands of the communities it is intended to serve.

While the threat of Elon Musk flooding Westminster with millions of pounds of political funding may have increased the calls for action to be taken on foreign donations and heightened awareness of the risks associated with big money in politics, concrete action to address this issue is yet to materialise.

Now is the opportunity for this new Labour government to demonstrate its readiness to take decisive action. While the fury of ‘gift gate’ may have subsided, the public’s distrust in politics and the motive of those in power remains.

By proactively addressing this issue, the government can pre-empt potential problems further down the line and foster public confidence that the decisions made by those in power are being done so in the public’s best interests.

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